NEWS PHOTO COLLIN GALLANT The owners of the Paradise Vally Par 3 course say they are frustrated with financial institutions and are appealing to local community to make an investment in the facility.
cgallant@medicinehatnews.com@CollinGallant
Owners of the Paradise Valley Par 3 golf course are working to avoid a sale but without finding new local investment, the course and related restaurant may have to be sold.
Dawn Postnikoff says she’s frustrated with new, tighter lending rules that caused her current bank to limit her business line of credit.
Meanwhile, a downturn in the golfing industry, and Paradise Valley’s status as privately owned course, without equity-holding members, and located on city-leased land, limits the collateral she can use to approach other banks.
“We’re reiterating that we’re not a traditional golf course, we’re not having the same problems,” said Postnikoff.
The business is now listed for sale as a final option, but Postnikoff told the News she’s hoping to avoid a sale, but requires new capital for the business she says is solid.
“We’ve never missed a payment, we’re profitable we’re paying down our debt … our rounds are up, our costs are down, our gross profitability is better than ever,” she said.
“Several years ago if your debt ratio was a little out of whack, but business was good, banks would overlook that … Now banks won’t do that anymore. They’re getting out of golf courses, and things are stickier than they use to be.”
This fall, Postnikoff began exploring new non-bank financing options and also opened talks with the city to alter her lease. That would either make it more appealing from a new investment standpoint, or increase the value in case of a sale, but those discussions are still underway.
Now, she’s hoping to strengthen the balance sheet she can show to lenders by adding another investor or local investors group, or even potentially a crowd-funding initiative for the wider community.
Meanwhile the clock is now ticking on a sale, she said, and a deal needs to happen soon.
“The business itself means a lot to the community over the years,” she said
The 40-year course is open to the public with a clubhouse that provides a strong event hosting and general dining revenue. Adding to the stress, renovations on the clubhouse are now underway ahead of a March reopening, said Postnikoff.
She and her husband acquired the course in 2008, and more recently brought in manager Kim Bronson as a minority shareholder.
The collateral issues of operating on city leased land are not uncommon.
The city currently guarantees loans totalling $1.7 million for the various groups, including entities that operate two other golf courses and the Medicine Hat Curling Club. Legally, those groups only own the buildings and improvements to land they lease.
As well, they are non-profit groups, not a private business, like Paradise Valley. The municipal practice of backing such loans, councillors have said, helps broad community groups that provide recreation services without the city expanding its own operations or offerings.
